and strategic analysis. Such cooperation can also take the form of joint training or seminars of the FIU and supervisors for the sectors.
With Reporting Entities Supervisors and other competent authorities are tasked with promoting an understanding of the legal framework and ML/TF risks. They therefore establish guidelines and provide feedback to assist financial institutions in applying AML/CFT measures and promote a clear understanding by financial institutions of their AML/CFT obligations and ML/TF risks. In Jersey, guidelines to clarify AML/CFT requirements are prepared by the Jersey Financial Services Commission with the assistance of a steering group representing the financial industry. The guidelines give special importance to corporate governance issues (board responsibilities, ML/TF compliance officer’s missions, and so forth) and cultural barriers to implementing an effective AML/CFT framework. The guidelines are discussed extensively with the industry. Ongoing collaboration between supervisors and the private sector they supervise is critical for the effectiveness of an AML/CFT framework. The private sector is on the front line of ML/TF risks and plays an important gatekeeper function. To achieve this collaboration, both supervisors and private sector entities should forge a working environment based on trust and understanding each other’s roles. A key requirement is that the private sector is included in the conduct of national risk assessments and that the results are shared with all covered entities. The importance of supervisor–private sector collaboration is particularly important for understanding and controlling ML/TF risks. In particular, having a common understanding of national and sectoral risks provides institutions with information to develop targeted ML/TF risk identification and assessment mechanisms and to implement risk-based AML/CFT systems (see appendix A). This, in turn, facilitates the supervisor’s development and implementation of a risk-based AML/CFT supervisory framework. AML/CFT training is another important tool for supervisor–private sector collaboration. While training for the staff of an institution is the primary responsibility of the institution, supervisors can organize seminars and workshops or participate in training events organized by sectoral associations. Supervisors should not, as a general principle, provide training to individual institutions. As mentioned, the FIU generally participates in such training events. Supervisors should support the establishment of associations of institutions, associations of compliance officers, or similar initiatives that provide a forum for supervisory cooperation in numerous fields.
INTERNATIONAL SUPERVISORY COOPERATION General As indicated by the FATF guidance, many regulated entities routinely operate across national borders and are therefore subject to AML/CFT supervision by several supervisory authorities in multiple jurisdictions. The ML/TF risks in question are frequently cross-border in nature, and failures in systems and controls in one part of the group may indicate weaknesses elsewhere. Therefore, cooperation between supervisors is important to mitigate those risks.
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PREVENTING MONEY LAUNDERING AND TERRORIST FINANCING
